1. What is Adjusted Gross Income (AGI)?

Adjusted Gross Income (AGI) is your total gross income minus specific adjustments. It's a key figure used to determine your taxable income and eligibility for certain tax credits and deductions.

2. How Does the Calculator Work?

The calculator uses the following formula:

Where:

• \( hourly\ rate \) — Your pay rate per hour
• \( hours \) — Hours worked per week
• \( 52 \) — Number of weeks in a year
• \( adjustments \) — Annual adjustments to income

Explanation: The equation first calculates annual income from hourly wages, then subtracts allowable adjustments to arrive at AGI.

3. Importance of AGI Calculation

Details: AGI is used to determine your tax bracket, eligibility for tax credits and deductions, and is often requested on loan applications and financial aid forms.

4. Using the Calculator

Tips: Enter your hourly wage, typical weekly hours, and any known adjustments to income (like student loan interest or IRA contributions). All values must be valid (rate > 0, hours between 0-168).

5. Frequently Asked Questions (FAQ)

Q1: What counts as an adjustment to income?
A: Common adjustments include educator expenses, student loan interest, IRA contributions, and self-employment taxes.

Q2: Is this the same as taxable income?
A: No, AGI comes before subtracting standard/itemized deductions and qualified business income deductions to arrive at taxable income.

Q3: Should I include overtime pay?
A: Yes, if your overtime hours are consistent, include them in your weekly hours. For occasional overtime, you may want to calculate separately.

Q4: What if my hours vary each week?
A: Use your average weekly hours for the most accurate estimate.

Q5: Are bonuses included in this calculation?
A: No, this calculator only accounts for regular hourly wages. Bonuses would need to be added separately to your AGI.